Auckland economic quarterly February 2019

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Auckland has a housing shortfall. Despite huge upzoning in existing urban (brownfield) areas through the Unitary Plan, pressure to develop previously undeveloped (greenfield) land is strong.

But there are huge infrastructure costs in opening up greenfield land, as well as several other external costs. These costs are routinely ignored by many proponents of large-scale greenfield development.

When greenfield infrastructure is announced, land there receives huge windfall gains, yet there is currently no commensurate requirement and little incentive for landowners to rapidly deliver land to the retail market to boost housing supply.

If central and local government commit to accelerate greenfield infrastructure at a developer’s request, even if funded by a targeted rate or infrastructure levy on that land, the developer agreement should require the land to be sold on the retail market within a set time of the infrastructure being provided.